Free Printable CIE AS Business Organisations

1.

This type of business is owned by one person.

a)

Partnership

b)

Sole Proprietorship

c)

Corporation

d)

Franchise

2.

Advantages of this business type are that the owner is their own boss and gets to keep all the profits.

a)

Partnership

b)

Sole Proprietorship

c)

Corporation

d)

Franchise

3.

Disadvantages for this type of business include: owner pays for everything, hard to get money to start from the bank, owner might lack skills & unlimited liability.

a)

Sole Proprietorship

b)

Partnership

c)

Corporation

d)

Franchise

4.

A business owner who prefers to maintain complete control of all business activities might consider structuring the venture as a(n)

a)

sole proprietorship

b)

general partnership.

c)

franchise

d)

corporation.

5.

The disadvantages of this business organization include unlimited liability, difficulty raising financial capital, difficulty attracting qualified employees, and having a limited life

a)

Sole Propriotorship

b)

Partnership

c)

Corporation

6.

What is a major advantage of a business that is a partnership rather than a sole proprietorship?

a)

The responsibility for the business is shared

b)

The business is easy to set up

c)

The partners are not responsible for business debts

d)

The business is easy to sell

7.

Which of the following is the definition for sole proprietorship

a)

business investment that involves renting or leasing another successful business model

b)

unincorporated business owned and run by a single person who has rights to all profits and unlimited liability for all debts of the firm; most common form of business organization in the United States

c)

unincorporated business owned and operated by two or more people who share the profits and have unlimited liability for the debts and obligations of the firm

d)

form of business organization recognized by law as a separate legal entity with all the rights and responsibilities of an individual, including the right to buy and sell property, enter into legal contracts, and to sue and be sued

8.

Which of the following is the definition for Franchise

a)

business investment that involves renting or leasing another successful business model

b)

unincorporated business owned and run by a single person who has rights to all profits and unlimited liability for all debts of the firm; most common form of business organization in the United States

c)

unincorporated business owned and operated by two or more people who share the profits and have unlimited liability for the debts and obligations of the firm

d)

form of business organization recognized by law as a separate legal entity with all the rights and responsibilities of an individual, including the right to buy and sell property, enter into legal contracts, and to sue and be sued

9.

Which of the following is the definition for Corporation?

a)

business investment that involves renting or leasing another successful business model

b)

unincorporated business owned and run by a single person who has rights to all profits and unlimited liability for all debts of the firm; most common form of business organization in the United States

c)

unincorporated business owned and operated by two or more people who share the profits and have unlimited liability for the debts and obligations of the firm

d)

form of business organization recognized by law as a separate legal entity with all the rights and responsibilities of an individual, including the right to buy and sell property, enter into legal contracts, and to sue and be sued

10.

Which of the following is the definition for Partnership?

a)

business investment that involves renting or leasing another successful business model

b)

unincorporated business owned and run by a single person who has rights to all profits and unlimited liability for all debts of the firm; most common form of business organization in the United States

c)

unincorporated business owned and operated by two or more people who share the profits and have unlimited liability for the debts and obligations of the firm

d)

form of business organization recognized by law as a separate legal entity with all the rights and responsibilities of an individual, including the right to buy and sell property, enter into legal contracts, and to sue and be sued

11.

Which of the following is an advantage of a sole proprietorship

a)

easy to start up

b)

Decisions do not require the approval of a co-owner, boss, or other "higher-up

c)

the owner can keep the profits of successful management without having to share them with other owners.

d)

All the other options

12.

Which of the following is a disadvantage of a sole proprietorship?

a)

it is easy to start

b)

he owner is personally and fully responsible for all losses and debts of the business. If the business fails, the owner’s personal possessions may be taken away to satisfy business debts.

c)

requires a partner

d)

it is easy to raise the financial capital to start

13.

Which of the following is an advantage of a partnership?

a)

they are hard to start

b)

management is hard between two or more people

c)

partnerships can usually attract financial capital more easily than proprietorships.

d)

They are inefficient.

14.

Which of the following is a disadvantage of a partnership?

a)

If one partner causes the firm to suffer a huge loss, each partner is fully and personally responsible for the loss.

b)

When a partner dies or leaves, the partnership must be dissolved and reorganized as a new partnership if the remaining partners want to stay in business.

c)

the potential for conflict between partners.

d)

all the options are disadvantages

15.

Which of the following is a disadvantage of a corporation?

a)

it is easy to raise financial capital using stocks, bonds, or loans.

b)

the double taxation of corporate profits. Profits are taxed the first time when the corporation pays income taxes. The profits are taxed a second time when shareholders pay taxes on their dividends.

c)

it is easy to get a charter to start a corporation.

d)

Owners and shareholders have total control over what happens with the business.

16.

Which of the following is an advantage of a corporation?

a)

all other answers are advantages.

b)

the corporation provides limited liability for its owners. This means that the corporation itself, not its owners, is fully responsible for its obligations.

c)

the corporation's board of directors can hire professional managers to run the firm. This means that the corporation's owners, its stockholders, can own a portion of the corporation without having to know much about the business itself.

d)

unlimited life, meaning that the corporation continues to exist even when shareholders sell their ownership shares of stock to someone else. Because the corporation is recognized as a separate legal entity, the name of the company stays the same, and the corporation continues to do business.

17.

Which of the following is a disadvantage of a Franchise?

a)

the expense of purchasing the rights to a franchise can be high.

b)

the cost to terminate a franchise before its term is high.

c)

not owning the company, just the franchise.

d)

all other options are disadvantages.

18.

Which of the following might upset the board of directors in a corporation?

a)

If the company's stocks are bought on an exchange

b)

if the company's stocks are sold on an exchange

c)

if the company's stocks increase in value

d)

if the company's stocks lose value

19.

Which of the following could be a disadvantage of a sole proprietorship?

a)

stockholders could withdraw investment

b)

limited life

c)

unlimited liability

d)

he will have to take on a partner if he wants to expand the business

20.

The following are disadvantages of a Partnership, EXCEPT:

a)

Unlimited liability

b)

Limited existence

c)

mutual agency of the partners

d)

larger sources of funds

21.

A person or company purchases the ability to run a local business under a larger company's brand

a)

Joint Venture

b)

Franchise

c)

Corporation

d)

Sole Proprietorship

22.

An agreement among two or more businesses to work together to provide a good or service

a)

Joint Venture

b)

Partnership

c)

Franchise

d)

Corporation

23.

The main reason why an entrepreneur will convert an LTD into a PLC is

a)

they don't want to remain in the private sector

b)

they want to gain the benefits of limited liability

c)

they want to keep the annual accounts secret

d)

they want to raise additional capital to expand the business

24.

One of the main disadvantages of a PLC is the

a)

loss of control by the owners as additional shares are sold

b)

firms in the public sector are often less efficient

c)

possibility that if a company fails owners might lose assets

25.

Which of the following statements about PLCs is most true

a)

The firm is owned and controlled by the workers

b)

The firm is owned by the directors but run by shareholders

c)

The firm is owned by shareholders and run by directors

d)

The firm is owned and controlled by the government

26.

One of the reasons an entrepreneur might buy a franchise is

a)

it is cheaper than setting up a new business venture

b)

there is complete control over important decisions

c)

the risk of failure is lower

27.

One of the disadvantages of an entrepreneur buying a new franchise is

a)

the profits of the franchisor's business will be lower

b)

a share of the set up costs will be paid to the franchisor

c)

consumers are less likley to not all decisions are taken by the franchisee

d)

consumers are less likley to have heard of the franchise

28.

All of the following are advantages of joint ventures except

a)

The cost of a new project can be split between companies

b)

Manufacturing costs will be divided between the firms

c)

Joint venture companues can enjoy economies of scale

d)

Management of a joint venture might cause disagreement

29.

Which of the following best describes the term limited liability? If the business fails:

a)

Personal possessions of the owner can be taken to pay any debts

b)

The owner is personally liable for all the debts of the business

c)

There is no limit on the amount the owner has to pay to settle debts

d)

The owner only loses the amount invested in the business

30.

Which type of legal structure is used when two or more people join together to start a business and have unlimited liability?

a)

Sole trader

b)

Partnership

c)

LTD

d)

PLC

31.

What are the owners of private and public limited companies called?

a)

Stakeholders

b)

Managers

c)

Board of directors

d)

Shareholders

32.

Which of the following is a drawback for an entrepreneur setting up a business as a sole trader?

a)

Profit is shared

b)

Financial accounts are kept private

c)

Limited liability

d)

Unlimited liability

33.

Which of the following is an advantage of operating a large established business as a public limited company?

a)

Shares can be sold to the public to raise additional finance

b)

Financial accounts are published

c)

Shares can only be sold to invited investors to raise finance

d)

Owners have unlimited liability

34.

A private limited company may change into a public limited company because it wants:

a)

Limited liability

b)

To raise additional finance

c)

Unlimited liability

d)

To avoid takeover

35.

Which of the following statements is always true of a public limited company?

a)

Shareholders have day to day control of the company

b)

Liability is limited

c)

The ability to expand is limited

d)

Board of directors own the business

36.

Which legal structure would an individual wishing to start-up a small business choose because it is quick, easy and inexpensive to set up?

a)

Sole trader

b)

Partnership

c)

LTD

d)

PLC

37.

Which of the following is a disadvantage of being a public limited company?

a)

The business is at risk of takeover

b)

Large sums of money can be raised

c)

Unlimited liability

d)

Limited liability

38.

Which of the following is a disadvantage of setting up a business as a partnership?

a)

Shared losses

b)

Shared workload

c)

Shared profit

d)

More ideas generated

39.

Which of the following are types of limited company? (Select 2 answers)

a)

Personal

b)

Private

c)

Public

d)

Premier

40.

Which of the following is an advantage of operating as a franchise?

a)

You can choose your own location

b)

You can sell whatever you want

c)

You have an established brand name

d)

You do not have to pay for staff training

41.

name one type of liability

a)

no liability

b)

shared liability

c)

unlimited liability

d)

bottomless liability

42.

what is the abreviation for public limited company

a)

ABC

b)

PLC

c)

LTD

d)

INC

43.

which one is a franchise

a)

b)

c)

d)

44.

what is a disadvantage of a limited company

a)

boring

b)

expensive to set up

c)

you get rich

d)

have limits

45.

What occurs when the owners of a business do not control the day-to-day decisions being made?

a)

Divorce between Ownership and Control

b)

Corporate Governance

c)

Strategic Drift

d)

Emergent Strategy

46.

In what scenario is there NO divorce between ownership and control?

a)

Sole proprietor

b)

Public company

c)

Corporation

d)

Facebook

e)

Tesla

47.

True or False. Ownership aims are always equal to manager aims.

a)

True

b)

False

48.

Fill in the Blank. Divorce between Ownership and Control occurs when the owners of a business __________ the day-to-day decisions being made

a)

Do not control

b)

Control

c)

Always control

d)

Manage

49.

What is a difficulty of the Divorce of Ownership and Control?

a)

Managers pursue own interests instead of owners' interests

b)

Managers pursue rising share prices

c)

Managers pursue dividends

d)

Managers solely pursue owners' interests

50.

The liability that partners in a partnership have

a)

Unlimited

b)

Limited

c)

Legal

d)

Liquid

51.

The maximum number of partners in a partnership is

a)

2

b)

10

c)

20

d)

149

52.

The name given to a share of the profits is called

a)

Share capital

b)

Investment

c)

Equity

d)

Dividend

53.

Which one of these is obliged to hold an AGM?

a)

Sole Trader

b)

Partnership

c)

Cooperative

d)

Private Limited Company

54.

What is the most significant risk factor in a sole proprietorship?

a)

Having no regular schedule

b)

Doing all of the work

c)

Having to answer to a board of directors

d)

Unlimited liability, even for employee actions

55.

Can a sole trader have other people working for them?

a)

Yes

b)

No

CIE AS Business Organisations

Total questions: 55

Worksheet time: 46mins

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